LONDON -The British government has given the green light to BAE Systems to build three Type 26 anti-submarine warfare frigates in a deal worth around £3.7 billion, or U.S. $4.9 billion, Defence Secretary Michael Fallon announced.

The deal is the first batch of a fleet of eight warships due to be handed over to the Royal Navy to replace the current Type 23 frigates for escorting the new Queen Elizabeth class aircraft carriers and protecting the nuclear submarine fleet as they come and go from their base in Scotland.

No precise delivery timelines for the new warships have been given by the MoD, but a BAE spokesman said the ship was scheduled to be accepted by the Royal Navy around the mid-2020s.

That would suggest a delay of a couple of years past the original timescale. Previously the two sides had been working towards having the first warship available for operations in 2023, when the first of the Type 23s, HMS Argyll, was due to be pensioned off.

The first of the new aircraft carriers started sea trials last week and is expected to start its first operational deployment in 2021, protected by updated Type 23s.

The Royal Navy had originally been scheduled to receive 13 of the Type 26s, but five of the warships were axed in the 2015 strategic defense and security review. Alternatively, those will eventually be replaced by a new general purpose frigate known as the Type 31. The Type 31 program remains undefined, and industry executives here said there is no real money yet available to get the project underway.

That said, signing of the Type 26 contract after around three years of fierce negotiations over price and terms and conditions might provide a boost for the marine industry here beyond the local market. The deal will reassure potential export buyers the program is going ahead roughly to schedule, said the executives.

Australia and Canada are expected to go forward with a new frigate program in the next few months and the Type 26 is a contender for both requirements.

Commenting on the deal, Fallon said: "The contract is structured to ensure value for taxpayers’money and, importantly, now designed to protect them from extra bills from project overrun. The investment will secure hundreds of skilled jobs at BAE Systems on the Clyde for the next 20 years, and thousands of jobs in the supply chain across Britain."

The MoD said in a statement the contract was "specifically structured to motivate both sides to deliver to a successful outcome, where both parties share in the pain and gain in the delivery of the programme."

BAE and Britain’s cash-strapped Ministry of Defence had originally been expected to cut steel on the first of the 6,900 tonne warships around this time last year, but the prolonged negotiations resulted in the deal only being concluded a few weeks ago. The official announcement was held up by last month’s general election.

The delay in completing negotiations has been mitigated by a series of long-lead item contracts to key equipment suppliers and demonstration phase work with BAE to mature the design.

The £3.7 billion price tag for the three ships includes money already spent on long-lead items, ongoing development costs and some infrastructure work being paid for by the MoD at BAE’s two yards in Glasgow, Scotland, where the warships will be built.

In a briefing with reporters last week, executives at Rolls-Royce Marine said the first of three MT30 gas turbines ordered under the long-lead time arrangement had already been delivered to BAE’s Glasgow yards where the warships are to be built.

Rolls-Royce is set to be a major beneficiary of the program. Aside from supplying one MT30 package per warship the company is providing a range of equipment including steering gear, rudders, propellers and mission bay handling systems. Its German subsidiary MTU is supplying diesel generators.

The MoD said the contract for the second batch of five ships is not expected to be negotiated until the early 2020s.